SRM Global Fund, the hedge fund owning a 5.19% stake in Countrywide Financial, is unhappy about Bank of America’s (BofA) proposed $4 billion takeover and says it will encourage shareholders to vote against the deal, the Financial Times Reports.
The hedge fund claims that BofA’s proposed merger “does not provide sufficient value” to Countrywide shareholders.
BofA had offered Countrywide shareholders 0.1822 BofA shares per share they hold in the bank, which SRM reckons if less than $8 a share.
“We are also very concerned by the movements in the company’s stock price in the days before the announcement of the merger and intend to ask the Securities and Exchange Commission to investigate.
“We think that the board of the company and its advisers should fully explain to shareholders the reasons why they have agreed to recommend the transaction to shareholders at less than half of the company’s book value,” says a statement from SRM.
SRM says it will attempt to “preserve the value of its investment and protect its rights and will vote against the proposed merger”.
Countrywide shares dropped by 2.8% in trading in New York.